London close: Stocks mixed as ECB stands pat, US inflation jumps

The FTSE 100 ended the session up 0.1% at 7,088.18, while the FTSE 250 was 0.66% weaker at 22,608.76.

Sterling was stronger, meanwhile, last trading 0.33% stronger against the dollar at $1.4165, and gaining 0.41% on the euro to €1.1637.

“It will be interesting to see who had ‘stocks up, gold up, dollar down after strong inflation report’ on their bingo cards today, but those are the current moves in global markets - an interesting reflection on how investors perceive the outlook for coming months for both prices and Fed policy,” quipped IG chief market analyst Chris Beauchamp.

“US markets had been hesitant all week, but have found a new lease of life now that the pesky CPI figure is out of the way.

“Meanwhile the ECB meeting was relatively dull by comparison, although the bank did take a fairly sunny view of the outlook, upgrading growth and inflation forecasts, while sticking to its bond-buying plans.”

Beauchamp said that even the expected changes to the statement regarding the level of purchases failed to materialise, although early post-decision gains in eurozone stocks were knocked back as the dollar weakened in the wake of the US CPI print, pushing up the euro-dollar rate.

“Having laid down a marker last month by pushing yields higher, the market appears to have given the doves the ammunition they needed to ensure the ECB will leave things as they are for the time being.”

Stateside, the monthly consumer price index released earlier in the afternoon revealed inflation in the US bounded ahead in May, with big gains across nearly all categories of products and services.

According to the Department of Labor, headline consumer prices jumped at a month-on-month pace of 0.6%, pushing the annual rate of increase from 4.2% for April to 5.0%.

Economists had forecast CPI to rise by 0.4% on the month and 4.6% on the year.

In addition to the CPI reading, the number of Americans lining up for state unemployment benefits declined for a sixth consecutive week, with initial claims decreasing by 9,000 to 376,000 in the week ended 5 June, according to the Labor Department.

Significantly, continuing claims for ongoing state unemployment dropped 258,000 in the week ended 29 May to 3.5m - the largest decline since mid-March.

Closer to home, the European Central Bank left its key interest rates unchanged, in line with analyst expectations.

Following the latest monetary policy meeting of the bank's Governing Council, the main refinancing rate - its headline interest rate - was kept at 0.0%, while the deposit facility rate was unchanged at -0.5%.

The marginal lending facility, which is paid by banks which borrow from the ECB, was also unchanged at 0.25%.

In its accompanying statement, the Council said it expected the key ECB interest rates to "remain at their present or lower levels until it has seen the inflation outlook robustly converge to a level sufficiently close to, but below, 2% within its projection horizon, and such convergence has been consistently reflected in underlying inflation dynamics".

In equity markets, Auto Trader Group rallied 6.54% after it said a dramatic shift to buying cars online during pandemic lockdowns helped it to limit full-year losses and reinstate its dividend.

The company reported a 37% fall in pre-tax profit to £157.4m as revenue fell 29% to £262.8m, and a dividend of 5p a share was declared.

BT jumped 6.55% after multibillionaire telecoms dealmaker Patrick Drahi bought a 12.1% stake in the group to capitalise on its involvement in the rollout of faster broadband in the UK.

Drahi bought 1.2 billion BT shares through Altice UK, which he wholly owns.

Outsourcer Mitie gained 5.86% after it posted a slump in full-year profit but said 2022 profit was set to be "materially ahead" of its prior expectations.

CMC Markets rose 1.74% after the online trading platform reported a 127% surge in full-year profits, with customer numbers up as it benefited from heightened volatility due to the pandemic.

On the downside, grocer J Sainsbury was 2.98% weaker as it traded without entitlement to the dividend.

Market Movers

FTSE 100 (UKX)7,088.180.10%
FTSE 250 (MCX)22,608.76-0.66%
techMARK (TASX)4,428.680.72%

FTSE 100 - Risers

BT Group (BT.A)195.15p6.55%
Auto Trader Group (AUTO)615.60p6.54%
Smith & Nephew (SN.)1,545.00p2.59%
AstraZeneca (AZN)8,282.00p1.87%
Rightmove (RMV)634.20p1.86%
Prudential (PRU)1,475.50p1.65%
Avast (AVST)485.00p1.25%
GlaxoSmithKline (GSK)1,396.60p1.17%
Scottish Mortgage Inv Trust (SMT)1,227.50p1.15%
Vodafone Group (VOD)129.66p1.11%

FTSE 100 - Fallers

Compass Group (CPG)1,594.50p-3.13%
Sainsbury (J) (SBRY)254.30p-2.98%
InterContinental Hotels Group (IHG)5,090.00p-2.30%
Taylor Wimpey (TW.)163.45p-2.24%
WPP (WPP)982.20p-2.22%
Land Securities Group (LAND)709.60p-2.15%
British Land Company (BLND)507.20p-2.08%
Antofagasta (ANTO)1,497.00p-2.06%
Next (NXT)8,018.00p-1.91%
Persimmon (PSN)3,058.00p-1.77%

FTSE 250 - Risers

Mitie Group (MTO)75.90p5.86%
Oxford Biomedica (OXB)1,208.00p4.86%
Network International Holdings (NETW)390.00p3.86%
Chrysalis Investments Limited NPV (CHRY)210.00p1.94%
CMC Markets (CMCX)497.50p1.74%
BB Healthcare Trust (Red) (BBH)187.40p1.63%
Liontrust Asset Management (LIO)1,590.00p1.53%
AJ Bell (AJB)431.40p1.41%
Beazley (BEZ)311.60p1.40%
Telecom Plus (TEP)1,208.00p1.34%

FTSE 250 - Fallers

Aston Martin Lagonda Global Holdings (AML)1,968.00p-5.93%
Restaurant Group (RTN)133.20p-4.58%
Wetherspoon (J.D.) (JDW)1,275.00p-4.14%
RHI Magnesita N.V. (DI) (RHIM)4,310.00p-4.09%
easyJet (EZJ)947.20p-3.95%
Carnival (CCL)1,798.40p-3.59%
Greencore Group (CDI) (GNC)132.70p-3.49%
Capital & Counties Properties (CAPC)171.70p-3.21%
Greggs (GRG)2,540.00p-2.98%
Howden Joinery Group (HWDN)770.20p-2.97%